San Francisco — In a bravest effort to start making money from its 20-million strong, location-sharing network; Foursquare has announced its long-awaited business model, the company announced plans to distribute personalized offers through a redesigned app in July that would empower merchants to buy placement for their promotions, Foursquare co-founder and CEO Dennis Crowley told The Wall Street Journal in an interview.
In fact, Foursquare already offers specials for users, but it has not charged merchants for special billing of those coupons. But in the near future, when users unearth new places and businesses in Foursquare’s Explore feature, merchants will get a chance to highlight their offers for users. All users will be able to see the specials, but must check into the venue to redeem them.
“We are developing software that is able to drive new customers and repeat visitors to local businesses,” said Crowley. The coupons are an upcoming feature and vendors will pay to have their business and the deals featured on Foursquare, he added.
Amazingly though, the three-year-old firm, with a growing base of 20 million users who have checked in two billion times, will be competing with a host of other Web entities targeting the local offer market, among them Groupon Inc., Facebook Inc. and Yelp Inc.
Moreover, this could be very significant toward responding Foursquare’s big question: how will it generate revenue? Well! last week the company disclosed that it would charge merchants $10 to instantly verify their business instead of doing it through the mail. In fact, that is probably not a big money spinner in the grand scheme of things.
But when it is merged with the coupons, it depicts how Foursquare is planning to make money. Essentially, it is attempting to get to the point where merchants who are using Foursquares’ free tools will be ready to start paying for them.
“We will essentially be offering promoted placement of specials within our redesigned app, targeted using the same technology that supports Explore, and some other premium features,” a Foursquare spokesperson informed Mashable.
Mashable further noted the communication: “We are getting really good at connecting people with places, and connecting those places with people,” Crowley said in the interview. “Instead of providing places we think you might be interested in, we can do the same things for businesses, and inform them these are the folks that are most likely to come here, based upon their check-in habits, based upon the places they have been to and their friends have been.”
And part of that is revenue. Foursquare has been the most fascinating portal for local for years now and is home to billions of check-ins–and that powerful information is going to drive its coupon efforts. The check-ins will empower users to redeem available deals from vendors who have signed up with Foursquare for the service.
As from a user perspective, it is all good news: If you are already a Foursquare user, then you are all for being rewarded for your check-in. It is a system that has already begun, with check-in loyalty being monitored by businesses using the app. Although, some possible backlash will come from those who feel their Foursquare experience is being driven by local retailers that are willing to use the new coupon service instead of other factors–like previous check-ins, or places your friends like.
Foursquare is quickly becoming a veteran in the social sphere, and to see it gently introducing a means to revenue generating options makes complete sense. Besides, its high time that the company starts diving into the loads of location data it has amassed to keep evolving its product. “One of the biggest growth areas for us as a company is hiring data-science folks to come in and start making sense of the two billion check-ins. They is really the secret sauce,” as Crowley puts it.